Question

Iggie took a university teaching job as an assistant professor in 1980 at a salary of $15,000. By 2011, she had been promoted to full professor, with a salary of $70,000. If the price index was 82 in 1980 and 225 in 2011, then what is Iggie's 1980 salary in 2011 dollars?

a. $25,511b. $52,073c. $40,140d. $41,159

Answer 1

d. $41,159

Step-by-step explanation:

This can be calculated as follows:

Iggie's 1980 salary in 2011 dollars = (2011 price index ÷ 1980 price index) × Iggie's 1980 salary = (225 ÷ 82) × 15,000 = $41,159.

Therefore, the correct answer is d. $41,159. That is, Iggie's 1980 salary in 2011 dollars is $41,159.